Three Rivers Independent School District is facing a budget deficit of $1 million for fiscal year 2013-14, but the district is prepared for the shortfall.

“My gut reaction was the values caught us off guard,” TRISD Superintendent Kenneth Rohrbach said. “These numbers will change as numbers come in...but the students and faculty are fine, and the savings is healthy, so a year of doing that isn’t going to hurt us at all.”

Preliminary property values presented to the board in April were $2.24 billion, but then they were certified at $1.91 billion. The overall value is up, but it’s not where the district thought they would be.

This happened because the comptroller valued the district higher than the Live Oak County appraiser did, but the district’s budget is based on the comptroller’s appraisal. This essentially means TRISD is paying recapture that is higher than on what it is collecting taxes.

Last year’s surplus was due to the comptroller’s appraisal being lower than the Live Oak County appraisal, according to Rohrbach. The current projected deficit for the district is $1,335,163.

Rohrbach said figuring out how much money the district gets based on property values is a fairly complicated formula, but it’s essentially taking the district’s total property values, divided by 100, multiplied by the tax rate and then paying a percentage of that back to the state to help support other schools. This leaves TRISD with about $7 million in the end from property taxes in addition to its other revenue sources.

The district projected 7,338,972 barrels of oil, but the actual production was 6,295,871, according to Capitol Appraisal Group Vice President Kenneth Hitt. This means the district over-projected oil production by about 17 percent. He said oil well production is dropping at a precipitous rate and landowners are getting checks roughly one-tenth of where they started.

Live Oak County’s chief appraiser, Jesse Hubble, said overall the district is up by about 3 percent.

“It was a significant drop-off in production from previous years,” Hubble said. “You’re not going in reverse; it’s just not the large increase we expected.”

Hitt said property values peaked in January 2012 and have dropped by over half to what they are today.

“Oil is like a fickle lover; she is here one day and gone the next,” Hitt said. “In the olden days, you used to take a pop bottle and see the gas come out. But these days with the fracking, it’s like shaking it or putting a Mentos in there; it’s incredible how much comes out.”

He said he had seen wells go from 30,000 barrels a day to 10,000 barrels a day in one year.

What this essentially means for TRISD is that the more drilling occurs the more property values increase, but it’s a double-edged sword because values go down with the depletion of resources.

“We tell taxpayers you will get half your money in 18 months,” Hitt said. “If you don’t save the first year, you won’t be able to pay taxes on it for the rest. These fracking techniques aren’t like your grandfather’s well; it comes out fast, and it’s gone.”

He said they calculate about 10-15 years of total activity for oil wells.

Hitt said there were half as many wells drilled last year than the year before with 84 total for 2012-13. But, he also said the Texas Railroad Commission just released some more data, and he counted about 18-24 that could be added to the district’s revenue.

The 84 wells gives the district $736 million in additional revenue but doesn’t make up for the $1 billion worth of production that was sold, and that’s why the district’s values are down, according to Hitt.

TRISD can only tax on what exists as of Jan. 1, and it only gets to keep what’s left over if the comptroller’s number is lower than what’s taxed. But, of that total, the district repays a percentage back to the state.

“The best thing to happen to us would be to have 50 to 100 new students,” Rohrbach said.

He said they anticipate property values will level out soon.

“At the next budget meeting, you probably won’t see this much of a deficit,” Rohrbach said.

Another budget workshop will be held prior to the next board meeting on Aug. 19 at 5:30 p.m. The board has until Aug. 30 to adopt a tax rate and budget for 2013-14.

In other TRISD news:

• The school board approved the formation of the TRISD Police Department. The district will have one officer patrolling the campus for security in addition to providing safety seminars with the students on everything from citizenship to abstaining from drugs.

“We felt it was time; the city was gracious to provide us with an officer last year, but he gets pulled out for various reasons and the board feels police presence is important,” Rohrbach said. “As much as the community has changed, they felt it was time to do it and have the officer work for us and under our direction.”

• The calendar was revised, moving the student holiday on March 3 to Feb. 3, 2014, because of state testing.

• The board approved working with the Schlechty Center to provide training to teachers and administrators on ways to design lessons that are more meaningful and engaging, according to Rohrbach. He said this will help the district determine what its values are, what goals it wants to achieve and what it wants students to be able to do.

“As a district, we need to decide how we’re going to measure success, and if it’s through a test you are limiting the scope of success,” Rohrbach said. “We need to decide how to measure success; it’s not on how kids do on a test on one day.”